ARM Holdings Plc is looking to build on its successful first quarter with new technology announcements at the Embedded Processor Forum in May and prototypes of its ARM10 core due in the middle of this year. The CEO of the Cambridge, UK-based RISC chip designer, Robin Saxby, said he was pleased with the firm’s first-quarter results, which saw profits up 91% to 3.2m pounds ($5.16m) as revenue climbed 51% to 13.1m pounds ($21.1m) for the period. The team did what we expected and the company had to do lots of work to keep staying there, Saxby said.
Sales of ARM-designed and licensed chips reached 48 million units in 1998, making it the second-largest company in the embedded processor sector after Motorola Inc. ARM’s business is founded on an intellectual property model under which it licenses its so-called core chip designs to chip manufacturers, such as Intel, who use them as the basis for their own products.
To succeed with this model, ARM needs to keep licensing buoyant, and it succeeded in the first quarter, with license revenue reaching 8.4m pounds ($13.56m) or 64% revenue. Repeat business to existing licensees was a major part of this figure, said Saxby, with 3Com Corp, Samsung Corp and Toshiba Corp all upgrading from ARM7 to ARM9 licenses in the quarter. In addition, new licensee Fujitsu Ltd. signed up for the ARM7TDMI design, which will be integrated into its own ASIC library and aimed at a variety of devices including drives and mobile phones.
The firm’s aggressive roadmap is also part of the drive for new licensees. ARM announced the ARM10 family at last year’s Embedded Processor Forum. And although the company would not give details of the technology announcements it will be making at the 1999 forum, they are likely to be of a similar magnitude. ARM spent 3.9m ($6.28m), or 30% of total revenues, on R&D in the first quarter.
European marketing manager, John Cornish, pointed to the 64% increase in systems development revenues over the same period last as a good indication of the likely shape of ARM’s next few quarters. Cornish described development systems, which consist of tools, compilers and circuit design systems, as seeds that could grow into full-blown licensing deals, as they indicated that companies were designing systems based around ARM cores.
Cornish said the company was very bullish about its market share in the wireless devices, what Cornish described as the [Nokia Oy] Communicator-like devices. Key new products due to be released using ARM-designed technology include an Ericsson EPOC smart phone and Bluetooth module (see separate story), a Nokia WAP phone and a Psion miniature laptop based on a StrongARM chip.
One possible future risk for the company is its decision not to start developing 64-bit core designs unlike IP rivals MIPS Technologies Inc, which has developed and licensed its ‘Ruby’ technology to NEC Corp among others. Talking to ComputerWire about Ruby and the move to 64-bit technology in March this year (CI No 3,615), Cornish claimed that there was no customer pressure or desire for 64-bit designs. He cited the demands on memory and power consumption as the reason why firms were not desperate for new 64-bit technology. 64-bit designs require, more memory space to hold the same number of instructions, Cornish said.
